10 Years After Financial Crash, Recovery Isn’t Over For New Yorkers

NEW YORK, NY – Ten years to the day after Bear Stearns fell, ushering in one of the worst economic recessions in American history, a new report shows that the recovery is far from over, and that many New Yorkers are still worse off today than they were before the crash.

The report, 10 Years After: the Financial Crisis and the New York Federal Reserve District, from Fed Up, a campaign run by the Center for Popular Democracy, comes as the New York Fed is undertaking a search for a new leader to replace outgoing President William Dudley, and raises the pressure to appoint a president who will have the interests of working people in mind in case of another crash. Fed Up’s report, which is being released as Congress is considering weakening Dodd-Frank financial protections enacted after the crisis, explores the extent to which communities throughout the New York Fed district still have not recovered from the devastation of 2008.

“A decade after the financial crisis, big banks are doing better than ever, but millions are still feeling the pain,” said Shawn Sebastian, Co-Director of the Fed Up Campaign. “Policymakers in Washington seem to have forgotten that history, but workers in the Fed Up coalition certainly haven’t. The recovery isn’t complete until all communities have recovered. Too many are still facing stagnant wages, a widening racial wealth gap, and persistently high rates of underemployment. The Federal Reserve has a responsibility to continue mitigating those issues - and that means appointing a New York Fed President who represents all communities, who has demonstrated independence from the financial sector and a strong commitment to achieving full employment.”

Key Findings in the Report
The report examines the lasting impact of the crash in the New York Federal Reserve district, finding that:

The top 1 percent of income earners received 23.8 percent of all income—an even greater proportion than before the Great Recession.

73 million adults, or 30 percent of all Americans, report they are either finding it difficult to get by or are just getting by financially.

The average annual wage rose just $2,500 over the last 10 years, not keeping pace with inflation.

The racial wealth gap has widened as average white wealth has gone up by more than $116,000 since the recession, while average Black wealth went down by $16,762 and average Hispanic/Latino wealth went down by $23,807.

6.2 million more people live in poverty today than before the financial crash.

Note on art/graphics for media: there are several infographics showcasing these facts and others in the report that are available as individual digital files for your use.

Principles for Next NY Fed President
The Fed Up report includes principles to guide the candidate search, especially prioritizing candidates who reflect the district’s gender and racial diversity and who have demonstrated independence from the financial sector. Given the New York Fed represents Puerto Rico, it also recommends a president who will resist the misguided approach of the Reserve Bank to date, which has endorsed austerity measures and recommended lowering the minimum wage to attract businesses. Finally, the report offers a series of recommendations to ensure the search for the next New York Federal Reserve Bank President is conducted in a transparent manner and provides opportunities for public input.

“The New York Fed can make history this year with a President who will both learn from the mistakes that allowed the last crash to happen and address the ongoing crisis American families face ten years after crash,” said Sebastian. “As one of the country’s most important regulators of the financial industry -- and one of the few economic policy officials who operates independently from the White House -- the next New York Fed President can help prevent another financial crisis while pushing for a full recovery from the last one. The next president must look beyond the headline unemployment numbers and truly give working people a chance to reclaim what they lost a decade ago.”

CPD Impact

Nov 2016: During 2016, the Federal Reserve made an historic shift in how it makes the most important economic decisions in the country. For the first time they are taking into account low-income communities of color. For the past 100 years the Fed has been dominated by white, male, corporate executives who have cared little about building an economy that works for everyone.